U.S. cities most expensive places to build globally

press release

International volatility and deglobalization is creating opportunities for construction in many markets, as countries across the world invest in manufacturing and defense to secure supply chains. 

• New York City and San Francisco top the table for average construction costs globally, at US$5,744 and US$5,504 per m2, Turner & Townsend reveals in a new report. 
• Relative political and economic stability in Western Europe and the UK sees Swiss cities and London round out the top five most expensive places to build. 
• 72 percent of regions report skilled labour shortages—as rising wage costs mean global average construction cost inflation is forecast to be 3.8 percent for 2025 and 4.0 percent in 2026. 

Despite deglobalization and geopolitical uncertainty, the international construction sector is proving resilient - benefiting from adaptable models built up during the past half-decade of volatility that can better manage costs and programs in the face of disruption.  

The Global construction market intelligence report 2025 from global professional services company Turner & Townsend shows some construction markets are benefitting from the turbulent economic headwinds. Investment is flowing into stable regions and longstanding markets, driving costs up, while countries choosing to near-shore manufacturing and build up local supply chains are also experiencing construction booms. 

In this survey of 99 global cities’ construction markets, the US maintains a strong hold on the top rankings of the most expensive places to build. Five US cities are in the top ten. New York is in first place, with an average cost of US$5,744 per m2, followed by San Francisco at US$5,504. Los Angeles (US$4,786) is sixth, with Chicago seventh (US$4,695) and Philadelphia in ninth (US$4,604).   

The costs are in part due to high construction labour costs across the US, averaging at US$76 per hour, and rising as high as US$US131.4 per hour in New York. This is being fuelled by a construction skills shortage of key specialists, as 87 percent of North American markets report shortages of mechanical, engineering and plumbing trades. 

This is part of a wider global picture of demand for skilled labour outstripping supply, exacerbated by moves in many regions to restrict migration. Seventy-one of 99 markets in the report declare that they’re experiencing a skills shortage, and this is helping keep average construction inflation above target—forecast to be 3.8 percent for 2025 and 4.0 percent in 2026. 

Other markets appearing high up in the cost rankings include Zurich, Geneva and London at third, fourth and fifth places (US$5,386 per m2, US$5,386 and US$5,385 respectively). As well as the impact of elevated wages as seen in the U.S., costs in Western Europe and the UK are being kept high by strong construction demand as global investment seeks the relative stability of the region and domestic governments aim to accelerate industrial and defense capabilities. 

The final country with cities in the top ten is Japan, which is seeing growth driven by the expansion of the country’s data center market and other high-tech industries. Tokyo is the eighth most expensive market, at an average cost of US$4,647 per m2 and is joined by four other Japanese cities in the top 15 (Sapporo, Osaka, Hiroshima and Fukuoka), making Japan the second most expensive country for construction globally, at an average construction cost of US$4,514 per m2. 

Japan is one of several Asian markets that is benefitting from moves towards greater self-sufficiency in the age of deglobalization. Manufacturing hubs like Vietnam, India and Malaysia are seeing significant uplifts in construction demand, partly encouraged by their comparatively low construction costs - US$1,147 per m2 in Hanoi, US$1,168 in Ho Chi Minh city and US$723 in Mumbai. 

“We're seeing shifting priorities and challenges across the globe. Geopolitical tensions and increasing polarization is changing where and how investment flows. However, while uncertainty is limiting confidence in some regions, it is creating opportunities in others.  

Whether businesses are making tactical moves to reorient supply chains, or pivot to invest in high-growth sectors like defense, advanced manufacturing and data centers - construction remains crucial to global resilience and growth.

Despite signs of increasing price stability and renewed activity in construction, we’re seeing a worldwide skills shortage that could put the brakes on growth. International labour could become less mobile as barriers to migration emerge, furthering adding to long-term dwindling of talent pools. 

To continue to deliver projects of unprecedented scale and complexity, agility and vigilance are vital. Clients need to try new approaches; from the foundational - investing more heavily in training local skills—to the innovative, such as piloting new AI tools or integrating digital solutions across the lifecycle of a project.”

Neil Bullen
Managing Director, Global Real Estate
Turner & Townsend